Businesses continue to struggle with the uncertainty and ambiguity that surrounds data privacy and protection laws in the United States. The undesirable result is a wide range of costs identified in a recent report published by the Data Catalyst Institute (DCI) and authored by George Mason University Law School professor Dr. Murat Mungan that breaks the costs down into seven distinct types.
Dr. Mungan also explains why regulations are so difficult to follow, saying, “Data protection and privacy regulations take place through a patchwork of regulation across the globe. A business in the United States may have to comply with state, federal, European, and other regulations, depending on the reach of its activities creating a great deal of uncertainty.”
The distinct costs outlined by Dr. Mungan are: research costs, deterrence of entry/less competition, stifling of R&D, avoidance costs, free riding, deterrence reduction, and quality reduction. When viewed in relation to an additional DCI analysis of India’s initiative to create a national e-commerce policy that received the lowest score given to date, it suggests that policymakers and industry stakeholders should take pause when undertaking new regulations.
Through reports like this, DCI focuses on improving data privacy and practices all over the world. Peter Cherukuri, Publisher and Executive Director of DCI, stressed that, “As policymakers consider regulation and legislation aimed at shaping data privacy policies, it is important they understand what is at stake.”
